Friday 27 November 2009 13.54 EST
First published on Friday 27 November 2009 13.54 EST

A sign jutting from an open patch of ground is the first clue to the business of Standish: "Prison area. Do not pick up hitchhikers."

Further along the road into the small, isolated Michigan town, a 16ft-high chain link fence topped with razor wire glistens from behind a cluster of trees. On closer inspection the main gate to what had been one of the state's toughest maximum security jails is wide open and its five watchtowers abandoned.

The place is not entirely deserted though. A small group of demonstrators is gathered at the entrance.

Standish is a town on the edge of bankruptcy. The murderers and serial rapists who once packed the prison provided the town of fewer than 1,600 people with a major part of its income and hundreds of jobs.

But the jail closed at the end of last month as Michigan cut back on public spending. The town lost a big part of its revenue from selling services to the prison, leaving it with a multimillion-dollar debt run up to provide the service infrastructure to the jail and forcing cuts including paring the police force down to one man. The financial crisis has been compounded by a city manager illegally spending much of Standish's financial reserves.

The one glimmer of hope of financial salvation is the prison's inclusion on a government shortlist of potential sites to house more than 200 "enemy combatants" held at Guantánamo Bay, commonly known as Gitmo.

"I really don't think it's necessary for the Obama administration to move them out of Guantánamo," said the mayor, Mark Winslow. "But if that's what he wants to do, then we're open to them coming to Standish. I can't believe in any way, shape or form that we wouldn't gain some jobs, economic benefits. We were sort of told that if we were selected the federal government would get us out from under the debt that we have."

No one in Standish is hugely enthusiastic about bringing "the terrorists" to town but many, like Winslow, think it may be the only way to stave off bankruptcy, or at the least a painful tax increase.

But there are those who are firmly against. Among them is Kelly Kimble, enduring the bitter morning cold to demonstrate outside the prison.

"When they come here they get the same rights that we get as US citizens, which is absolutely deplorable. Why do they get the same rights that I have? I'm a 19th-generation American whose family came from England.

"Why should they get the same rights I have? That means they get their attorneys, they can have visitors, they get everything that everyone else who is a federal prisoner has," she said.

"We'll become a soft target. The jihadists will come here and kill us. Why would we do that to our children? Gitmo right now supposedly has this horrible image in the world … I personally don't care if they don't like us or not. I just don't. That being said, if Guantánamo is this horrible, awful symbol of the United States, does bringing them to Standish, Michigan, change that? No. Standish, Michigan, has the horrible, awful image because we now have the detainees."

The mayor, a retired train driver, is not worried about terrorist attacks. But he does have other concerns that he has tried to raise at council meetings – will the government seize homes near the jail to clear a safe perimeter around it? – only to see the discussions degenerate into raucous confrontation.

"One of the ladies we had at the meeting, who worked out at the prison, was saying that these detainees were less than human.

"One of the councilmen said he didn't have any more fear of the detainees than he did of some of the people we currently had out there. We got murderers and rapists, people I wouldn't want to see bust out. She said, well at least they're human, they're just like you and I, American citizens," he said. "They brought some guy in here from Oakland county in the Detroit area that has a huge Middle Eastern community. Well, he stood in the back row here and said that what these people will do is they'll go over to your middle school over here and rape the young girls, and the young boys won't be big enough to defend themselves. This is ridiculous."

Munson, a restaurant owner who has led the campaign against bringing the Guantánamo prisoners to Standish, doesn't think it is ridiculous.

"If you bring these people here this town is going to be the bullseye and we're going to be the soft targets around it. What have they done in the rest of the world? What have they done in Israel? What have they done in Thailand? In Russia?" he said.

Munson attempted to highlight those fears by running against Winslow in last month's election for mayor, only to be soundly beaten. Winslow interprets that victory as most people in town accepting that housing the detainees may be a small price to pay for a leg up in one of the most economically devastated parts of the country.

Michigan has the highest unemployment rate of any US state, at 15%. In the county that includes Standish it is a couple of points higher.

It wasn't always that way. The car industry that had been the engine of American prosperity for so many years was centred in Michigan. Many of Standish's residents worked in the General Motors factories in Flint, an hour down the highway.

"In the good years, everybody was rolling in dough," said Winslow. "You had factory workers making $70 an hour with benefit packages. Unbelievable amounts of money. When you have a state that hitches its star to one industry, like the auto industry, and then it goes kaplooey, then your state's in trouble. This town is kind of like a microcosm of the state. We were hitched to one big buyer of our services and it's gone all of a sudden."

The economic battering was bad enough but last year the council discovered that the city manager, Tori Kelly, had illegally spent most of Standish's reserves in an effort to hide its financial difficulties. She has since been convicted of embezzlement.

"She really hurt the city badly," said the mayor. "We've had to make cuts. We've had to cut the office staff down to part-time. We honed the police department down to one man and he's on a limited budget. Some people would like us to get rid of the police department altogether. But we can't just get rid of it, we have to replace it with something."

The mayor mulls over the idea of the town relying on the Michigan state police, but thinks that probably wouldn't work either. "They're strapped too. Half their cars are sitting out the back of their building because they don't have the manpower or the money," he said. "The only way we can get relief is to default on the payments on our debt and that's not a place we want to go because the state of Michigan would step in.

"We would lose control of our town. Somebody else would call all the shots. If the prison doesn't open up again we have to get out of this mess ourselves."

Jails in contention

Barack Obama had promised to close the prison at Guantánamo Bay by the end of the year, describing it is as a stain on America's reputation. But that has proven tougher than he thought, with resistance in Congress to moving the remaining "unlawful combatants" held there to US soil.

The government is considering several prisons to house the detainees. Recently officials surveyed the Thomson Correctional Centre, three hours' drive west of Chicago, an eight-year-old prison that is largely unused. Other contenders to house the Guantánamo prisoners are maximum security jails in Standish, Michigan, the supermax prison built for some of the US's most dangerous prisoners south of Denver, Colorado, and Hardin, Montana, where the town council has been lobbying the administration to move detainees to its empty jail. But Montana's Congress members argue it could make Montana a target – a sentiment heard in all states on the list, even if some locals are more receptive to the promise of jobs. A decision is expected in February.